What’s the best metaphor to describe what your most recent due diligence process felt like? Herding cats? Spinning too many plates? Train wreck? We can relate. In spite of all the due diligence experience most acquirers have, there is still a surprising lack of effectiveness when it comes to running a diligence process.
Most diligence efforts break down in one or more of the following areas:
- Not all essential areas are addressed (financial, tax, operations, IT, market / competitor, culture, HR, talent, etc.).
- Multiple specialized diligence providers (legal, accounting, tax, IT, operations, HR, etc.) each bring their own processes, their own checklists and their own resources resulting in redundancy, rework, delay and inefficiencies.
- Critically important, deal-specific issues get missed entirely or worked superficially due to the fragmentation of efforts among functional groups or service providers.
- Lack of standardized processes, tools, analyses and deliverables yield a bewildering array of outputs right when you need the most clarity and brevity.
As a result, the failure to effectively manage the complexities and dynamics of a diligence effort costs you time and money, and leads to confusion, lower quality deliverables, failure to understand key issues and missed opportunities to effectively mitigate potential risks.
"Describe what your most recent due diligence process felt like? Herding cats? Spinning too many plates? Train wreck?”
Every acquirer wants to focus the right resources on the right issues and efficiently manage data and timelines in order to consistently produce high-quality analysis, but how?
Experts in due diligence have developed the equivalent of the Integration Management Office (IMO) – in this instance, the Diligence Management Office (DMO) – as an industry-leading best practice that addresses many of the most problematic failures of the due diligence process. This important solution shares several common aspects with an IMO, but with numerous essential differentiators leading to superior due diligence outcomes, including:
- Project team governance, roles and responsibilities are clearly established and filled by the best resources as determined for each specific due diligence.
- A rigorous program management approach is applied across all workstreams, special issues and timelines.
- Special focus issues or subject areas are assigned to expert resources. These might include cross-border, unique regulatory or environmental requirements; product, process or market issues that are new or different for the buyer; and certain strategic imperatives that the deal value proposition or purchase price consideration may rest on.
- Standardized tools, templates and reporting requirements are implemented to ensure speed, efficiency and the right level of analysis, resulting in actionable insight and intelligence.
Learn more about best practices for establishing a DMO, along with other best practices for strategic due diligence. Join us for The Art of M&A Due Diligence, where we'll present alongside experts from BDO and Willis Towers Watson. Space is limited, so register today!